Re: Governor Carcieri's Budget: Early Reporting

Here are some annotated excerpts of Governor Donald Carcieri’s explanation of his budget .

1. Cuts are necessary because, under the existing structure of Rhode Island government, spending is growing twice as fast as revenues…

Here is the problem we faced in putting this budget together. Although our revenues were projected to grow at the healthy rate of 4.3 percent, state spending was expected to grow by over 9 percent. In other words, we were scheduled to spend twice as much as we hoped to earn.

In my budget, I have reduced the growth rate in spending from that original 9% projection, to just over 3%, after factoring out a few one-time adjustments.

2. The decision not to pay social services benefits to illegal aliens -- who are not eligible for the programs by law -- is going to be more controversial than it should…

We will save over $11.2 million by improving the integrity of Rhode Island’s social service programs, primarily by implementing new federal requirements regarding the verification of every beneficiaries’ citizenship.

This is merely a decision to enforce existing laws. If proponents of benefits for illegal aliens don’t like it, then they should change the law (and also tell what taxes they are going to raise or what programs they are going to cut to pay for the additional benefits they support), not demand that the law go unenforced.

3. There are another $95,000,000 in budget cuts described in rather vague terms such as “administering a host of state programs more efficiently”, “redesign[ing] several state programs”, “better coordinating the services we are providing to clients” in multiple departments, and “using the state’s purchasing power to negotiate better deals for the taxpayers”.

The Governor describes several choices included in this $95,000,000 as “particularly difficult”…

First, we are reducing the eligibility in the child care subsidy program from 225 percent of the federal poverty level to 150 percent. We are also delaying a scheduled increase in state reimbursement rates for child care providers….

Second, we are reducing services being provided to young adults by the Department of Children, Youth and Families. Specifically, we will eliminate services to participants over the age of 17. DCYF currently serves young adults up to the age of 21….

Over the next several months, my administration will work with the General Assembly and the Judiciary to outline a set of alternative sentencing and community corrections options that will enable us to reduce the number of inmates by 500 from the currently projected levels. This reform will save taxpayers approximately $3 million next year, and many millions more in the future.

4. A reduction in direct expenditures by the state on operations and personnel account for another $24,400,000 budget cut…

We will save on personnel by privatizing food services and housekeeping at Eleanor Slater Hospital and the Veterans Home. Together, these measures will save $3.3 million and reduce the workforce by over 200 positions.

We will further reduce the entire state workforce by another 168 positions statewide through a targeted layoff, saving an additional $9.3 million. I have instructed my department directors to identify specific positions to be eliminated so that we can start the layoff process outlined in collective bargaining agreements immediately.

Seven statewide furlough days between this current fiscal year and next year will save another $10.8 million.

5. The Governor also discusses two primary areas where spending will increase. One is education aid to cities and towns…

Despite severe fiscal challenges, my budget will increase state aid for education by a total of $46.4 million, or 5.4 percent. Of that, $19.4 million is in direct school aid. That’s a 3 percent funding boost in unrestricted aid for every Rhode Island school system!

This too will be controversial; the urban communities will shriek at the idea of towns being treated as if their supposed to get some return on their tax dollars; don’t they know that their primary reason for existence is not to educate their own children, but to provide subsidies to the urban core?

6. The Governor also wants to direct a one-time infusion of tobacco settlement money towards capital transportation improvements…

We believe we can secure another $160 million through the sale of additional tobacco bonds. But let me be clear about one thing. These tobacco settlement proceeds may only be used for capital projects. My plan would not use a one-time infusion of tobacco money to pay for ongoing, or recurring programs that are part of the yearly operating budget. We must not use it to pay for expenses that we know we will have again next year.

Instead, we will use this money for one-time, nonrecurring expenses like road paving and bridge repair.

7. Finally, there’s no mention of any sort of pension or public-employee benefit reform in this budget. Some Rhode Island observers have described the state trajectory as headed towards an inevitable conflict between cutting public employee benefits or cutting social welfare programs. Is the decision that it will be the welfare programs that are cut starting to be made? (Or will the tobacco money end up being used to pay for operating costs and social welfare checks, pushing the decision one at least more year down the crumbling road?)